Norway’s Sovereign Fund Stays Course
Posted on 04/12/2013
Norway’s Government Pension Fund Global (GPFG) had their second best performance ever in 2012, generating 13.4% in returns. As Europe’s largest public equity investor, the sovereign fund returned 18.1% in equity investments. Part of the returns can be related to actions enacted by the European Central Bank (ECB) that were declared in July 2012.
According to a release by the Norwegian Ministry of Finance, “The Ministry presents analyses of several aspects of the strategy, but does not present plans for major changes to the investment strategy of the Fund.”
Norway’s GPFG is a major passive investor. The sovereign fund also believes in a level of active management. Around 60% of the sovereign fund’s assets are in public equities. In addition, 3.7% of fund assets are managed externally at the second quarter of 2012. Equity investment mandates are awarded to external managers with expertise in specific markets such as niche markets in developed economies or emerging market investments.
According to Finance Minister Sigbjørn Johnsen in the press release, “Active management has over time contributed to an excess return well in line with the expectations we have communicated.”
Keywords: Norway Government Pension Fund Global.